By RTT News,
January 08, 2014, 08:01:00 PM EDT
(RTTNews.com) - Construction materials maker Texas Industries, Inc. ( TXI ) reported Wednesday a loss for the second quarter that widened from last year, despite net sales growth, reflecting primarily higher interest expense. Loss per share for the quarter came in significantly wider than analysts' expectations and quarterly sales also missed their estimates.
"A number of non-recurring and short-term factors masked the improvement in both demand and pricing we are experiencing in our markets. Abnormal periods of inclement weather in Texas negatively impacted shipments in the quarter and product and geographic mix shifts reduced our reported average sales price," CEO Mel Brekhus said in a statement.
The Dallas, Texas-based company reported a net loss of $17.64 million or $0.62 per share for the second quarter, wider than $11.12 million or $0.40 per share in the prior-year quarter.
On average, nine analysts polled by Thomson Reuters expected the company to report a loss of $0.25 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter increased to $208.89 million from $167.69 million in the same quarter last year, but missed five Wall Street analysts' consensus estimate of $220.25 million.
Total cement segment sales were $94.86 million for the quarter, higher than $82.58 million a year ago. Cement shipments rose to 1,185 tons from 1,034 tons last year, and prices edged up to $80.10 per ton from last year's $79.82 per ton.
Total aggregate (stone, sand and gravel) segment sales increased to $31.92 million from $27.74 million in the previous year. Shipments edged up to 3,840 tons from 3,808 tons a year ago, and prices also grew to $8.31 per ton from $7.28 per ton last year.
Total ready-mix concrete sales surged to $93.17 million from $52.76 million a year ago on higher shipments, which rose to 1,079 cubic yards from 643 cubic yards. Prices also grew to $86.32 per cubic yard from $81.99 last year.
Total consolidated cost of products sold increased to $194.74 million from $155.94 million a year ago, and gross profit grew to $14.16 million from $11.75 million a year ago.
Selling, general and administrative for the quarter increased to $19.66 million from $17.07 million in the prior-year quarter. Interest expense also more than doubled to $17.42 million from $7.46 million last year.
"The quality and value of our assets and the earnings potential we have previously discussed are as strong as ever and I look forward to capitalizing on current demand and pricing trends," Brekhus added.
The company noted that the starting of production at a new second kiln last year puts it in a strong position as it enters the spring shipping season. The second kiln will enable the company to supply an additional 900,000 tons annually and increase its ability to take advantage of increased demand for cement in south and central Texas.
The company added that it has announced cement price increases of $8 per ton in Texas for April 2014, $3.50 per ton in California for January 2014 and $5 per ton in April 2014 due to the increasing improvement in construction.
Reports is mid-December revealed that the company is exploring a sale and are working with Citigroup Inc. ( C ) to find a buyer. Texas Industries' largest shareholders, Southeastern Asset Management Inc. and NNS Holding, have been seeking to sell their stakes in the company for some time. Combined, the two investors reportedly own more than 51 percent of the company, which has a market capitalization of $1.67 billion.
TXI closed Wednesday's regular trading session at $64.97, up $0.08 or 0.12% on a volume of 0.30 million shares.
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